Investors
March 01 2005
by Brieifng StaffSocially responsible investment analysts do not generally suffer from a lack data and information on a wide range of social, environmental and ethical (SEE) issues. In addition to their own extensive in-house research material, they are generally spoilt for choice as they sift through the numerous surveys, indices and rankings published almost weekly. The Global 100 survey, launched with much fanfare at the World Economic Forum, provided one of the latest examples.
The survey identified actual initiatives companies have made to become more sustainable: BP is singled out for its participation in emissions trading schemes, development of a solar power business and a shift towards natural gas from oil; Toyota is identified for its commitment to environmental management, with particular emphasis on its hybrid Prius model, the fastest selling car in the US last year.
All well and good. But, how can companies such as BP, whose business essentially involves pumping out a finite resource, and British Airways, whose business is essentially burning that finite resource, be members of any sustainability ranking?
Certainly this question hinges on one's definition of 'sustainability'. But Global 100 provides very little evidence of a rigorous methodology. And Innovest, who supplied the research for the survey, wants to keep it under wraps.
Surveys such as Global 100 are guilty of 'showboating' companies that are 'good', and as such are generally unhelpful in convincing a predominantly distrustful financial world of the merits of SRI. In stark contrast, AccountAbility and the World Economic Forum's report Mainstreaming Responsible Investment makes a very good case for rigorous reporting of SEE issues, so that the real owners of capital - you and me through our pension schemes and investments - are properly represented by institutional investors. By introducing a thorough approach to responsible investing, AccountAbility hopes to propel it from the boutique to the mainstream financial community.